1. Field of the Invention
The present invention relates generally to a telecommunications system for providing a wireless local loop, the system including a fixed hardwire network platform having at least one Independent Central Office located within a new residential or commercial development and connected to the Public Switched Telephone Network (PSTN), at least one subscriber base station, and subscriber terminals communicating with the fixed network via a radio path.
2. Description of the Prior Art
The divestiture of American Telephone & Telegraph (AT&T) in 1984 resulted in the creation of seven Regional Bell Operating Companies ("RBOCs"). Since AT&T remained as purely a long distance carrier, the business of providing local telephone services came under the control of these seven RBOCs. After divestiture, the seven RBOCs (the "Incumbent Local Exchange Carriers" or "Incumbent LECS") owned all of the expensive "hardwire" infrastructure necessary to provide local telephone services and owned the local networks to which all of the long distance carriers ("IXCs") had to pay access fees in order to originate and terminate their customer's long distance calls. Since the RBOCs had not been required to freely allow competition for local telephone service in the local markets, to date no company has been successful in entering the estimated $100 billion Local Exchange Carrier ("LEC") market in the United States on a large scale, large scale being defined as including residential customers. Therefore, regarding the provision of local telephone services across the United States, the AT&T divestiture in 1984 basically replaced a national monopoly (AT&T) with seven geographic monopolies (RBOCs).
Despite the passage of the Telecommunications Act of 1996, the purpose of which was to effect significant competition in the LEC markets, the existing RBOCs, due to their overwhelming size and their ownership of the existing infrastructure, have to date been successful in inhibiting any significant competition in the LEC market since any new entrant into the market has only two options for the provisioning of local telephone services: (1) building new infrastructure which is prohibitively expensive, or (2) successfully negotiating contracts with the Incumbent LECs which require the payment of excessive fees to the Incumbent LECs in order to utilize the LEC infrastructure to resell local telephone services. Neither of these options is particularly appealing since either option substantially favors the RBOCs in the following ways:
1. There is currently no viable, cost effective alternative to the conventional "hardwire" platform to allow large scale competition in the LEC market on a national basis or even on a regional basis. PA1 2. The costs to build a new infrastructure today are prohibitive. In a Wall Street Journal article dated Feb. 12, 1996, the costs of building such an infrastructure were projected at $5 billion to "get started" and $20 billion to "extensively penetrate the market." It has since become clear to the entire telecommunications industry that these projected costs were very low. In 1996, both AT&T and MCI announced strategic plans calling for large scale (including residential customers) building of local networks to compete with the Incumbent LECs. However, neither AT&T nor MCI has pursued these plans and both have admitted publicly that doing so, on a large scale, would not be economically feasible. On Jul. 14, 1997, the Wall Street Journal reported MCI's projected loss of $800 million in its attempt to build local networks in a number of metropolitan markets to begin to compete for local commercial accounts. This news caused MCI to lose $5 billion of market value in one day! Similarly, AT&T spent $4 billion on its efforts but reaped only $65 million in revenue in its unsuccessful attempt to enter the LEC market for residential services. PA1 3. The RBOCs have enjoyed one of the highest operating cash flow margins of any U.S. industry, over double that of the IXCs. While the LEC business has remained "proprietary," the long distance business, with its increased competition, has become much more of a "commodity" business. AT&T has had its market share drop to 50% since 1984 and has had its average revenue per minute cut almost in half. Hence, AT&T and MCI are not in a position to "outspend" the RBOCs in infrastructure development. PA1 4. The RBOCs have all filed to become long distance service providers ("IXCs"). In contrast to the plight of AT&T and MCI in their attempts to enter the LEC market, there are no costly infrastructure obstacles blocking entry of the RBOCs into the IXC market: the RBOCs can buy ready made networks from IXC providers at wholesale rates for immediate deployment. The RBOCs initially announced that their initial strategies regarding the provision of long distance services would be to resell, where discounts usually run about 80%. However, in contrast, the resale discounts the RBOCs originally intended to offer the IXCs for resale of local services were closer to 10-15%.
To ensure their own competitive survival, the IXCs must make inroads into the profitable LEC market. However, to date no technology has been proposed which would enable a company independent of the RBOCs to provide local telephone services at a competitive cost. None of the solutions requiring infrastructure investment is economically viable for the reasons noted above. There is thus a great need in the art for a system and method which would enable a company, independent of the RBOCs, to provide cost competitive local telephone services, and hence meaningful competition to the incumbent RBOCs in the LEC market, without requiring a cost prohibitive infrastructure investment.
Embodiments of the present invention have also been designed to meet another great need in the art, the need to significantly reduce the monopolistic access charges charged by the LECs on most long distance calls, charges which cost customers tens of billions of dollars each year. Most long distance calls must be originated through the LEC switch, and most calls are terminated by the LEC switch as well. Therefore, access charges payable to the Incumbent LECs continue to be incurred. Specifically, with respect to outgoing calls placed from a subscriber location, the LEC switch which serves the subscriber's customer premises equipment senses an off-hook condition and extends dial tone. When the dialed digits are received in the LEC switch, any features associated with the originating subscriber, such as speed dialing, are applied to the call, and the call is then routed to the desired destination. If the call is a long distance call that is routed to a long distance or inter-exchange carrier (IXC), then the IXC will pay originating end and terminating end "access charges" to the LEC for servicing the call, and the subscriber will, in turn, pay the IXC for the total cost of the call.
Currently, the access charges paid to LECs by the IXCs for the use of carrier common line service vary by LEC but can constitute upwards of 40% of the overall cost of the call. Accordingly, eliminating the stranglehold the LECs have on the local market and their claims to the originating end access charges could save a significant percentage of the cost of a long distance call. Bypassing the LEC and the associated originating end access charges could also save the IXCs a significant portion of their service costs for providing long distance calls and, once the associated savings are passed on to their subscribers, potentially save their subscribers billions of dollars each year in long distance charges. Payment of such access charges remains a key issue in the telecommunications industry since the passage of the Telecommunications Act of 1996 and is one of the primary obstacles to enhanced competition between the LECs and other potential entrants into the local telecommunications marketplace. As a result, any long distance service provider who can bypass the LEC and avoid payment of the originating end access charges will be at a substantial competitive advantage. Not unexpectedly, the RBOCs are utilizing every possible means to protect their access charge monopoly, and hence, have currently tied up the implementation of certain provisions of the Telecommunications Act of 1996 in district court litigation.
One proposal for bypassing the LECs is to implement fixed wireless technologies for local services. For example, IXCs have proposed to enter the local telephone market by implementing fixed wireless local loop systems such as "Project Angel" announced by AT&T in February, 1997. However, to date, such systems have not been implemented in the residential marketplace because of the prohibitive deployment costs and lack of a technology solution that would reduce these costs. "Project Angel," in particular, has yet to be implemented, and it has been reported that unless deployment costs are brought down significantly from where they are today to make Project Angel an economically viable local service option, it will not be implemented. To date, efforts by the IXCs to compete for local services have concentrated on providing digital cable and fixed wireless networks primarily to the local business market where the deployment costs per telephone line are significantly lower and the revenues generated are substantially higher than for residential customers. However, AT&T has announced a merger with TCI, a major cable company, indicating a possible shift to the use of cable lines to provide local telephone service to residential customers. Such changes in strategy have become necessary because the deployment costs of alternative technologies such as fixed wireless local loop systems simply have been found to be too great to build a competitive infrastructure to compete against the established Incumbent LECs for the telephone services of suburban and rural customers. The present invention specifically addresses the needs of these residential customers.
The plunging costs of cellular telephone services have compounded the problem facing those considering building infrastructure to implement fixed wireless local loop telephone services. In fact, IXCs AT&T and Sprint have aggressively attempted to move customers to their own digital wireless (cellular or PCS) services because the deployment costs for Project Angel and other fixed wireless local loop systems have made fixed wireless systems a less desirable alternative. Indeed, if the deployment costs for fixed wireless local loop systems cannot be brought down, IXCs such as AT&T have indicated that they will likely have to drop their plans for fixed wireless local loop systems.
Accordingly, a system is desired which will enable the cost-effective implementation of a fixed wireless local loop system which is independent of and cost competitive with the LECs and which preferably provides access to at least some portions of the residential local telephone market. The present invention has been designed to meet this great need in the art.